• We are available for your help 24/7
  • Email: info@isindexing.com, submission@isindexing.com


Paper Details

A STUDY OF INVESTOR BEHAVIOR IN THE FINANCIAL MARKET USING CUMULATIVE PROSPECT AND RADNER THEORY

A STUDY OF INVESTOR BEHAVIOR IN THE FINANCIAL MARKET USING CUMULATIVE PROSPECT AND RADNER THEORY

*Zafar Iqbal **Irtaza Ishtiaq ***Ghazala Akhtar ****Ibnali Issah Kulo

Journal Title:Cosmos An International Journal of Management
Abstract


This study compared cumulative prospect theory and Radner theory when it came to analyzing investor activity in the stock industry. The study's specific goals were to see whether there were any correlations between the cumulative prospect theory and Radner theory, as well as to determine the cumulative prospect theory's financial market consequences, the Radner theory's financial market implications, and the cumulative prospect theory's and Radner theory's disadvantages. The study surveyed applicable extant literatures on investor behavior in relation to cumulative prospect theory and Radner theory in a comparative manner using a desk top library analysis methodology. The findings suggest that investors' risk/uncertainty attitudes influence their investment/consumption decisions. They would rather see a higher return than a lower risk, as well as a higher level of gratification from committing wealth to an asset package in the event of general equilibrium. The cumulative prospect hypothesis and Radner theory have also observed and discussed these behavioral dispositions. The cumulative prospect theory and Radner theory are barometers by which investors' investment trajectory is continuously watched in the equity market all over the world, according to the study's findings. As a result, financial analysts/experts, market participants, and managers should often mix the fundamentals of conventional finance and behavioural finance while evaluating assets and studying/observing the reactions of a large number of competing investors, especially in ideal, full, and incomplete markets, according to this analysis. Keywords: Investor Action, Cumulative Prospect Theory, Radner Theory, General Equilibrium.